Retiring Debt Early.
Smith & Company issued $100 million maturity value of six-year bonds, which carried a coupon rate of six percent and paid interest semiannually. At the time of the offering, the yield rate for equivalent risk-rated securities was eight percent. Two years later, market yield rates had risen to ten percent, and since the company no longer needed the debt financing, executives at Smith & Company decided to retire the debt.
Calculate the gain or loss that Smith & Company will incur as a consequence of retiring the debt early. Is
the early retirement of the debt a good decision? What factors should be considered in making this decision?
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I am trying to figure out the social security tax for the employees in this problem, becuase I have to post it all in a chart. I have tried multiplying by the 6.2 tax rate but my program says my answer is wrong. So, is there a different way to calculate social security tax or is there something that I am missing that the problem is asking me to do? I am not looking for answers, but just a clear formula or instruction to get to the right answer.
Nashville Publishing Company pays its employees monthly. Payments made by the company on October 31, 2019, follow. Cumulative amounts paid to the persons named prior to October 31 are also given.
1.Paul Parker, president, gross monthly salary of $20,000; gross earnings prior to October 31, $160,000.
2.Carolyn Wells, vice president, gross monthly salary of $15,000; gross earnings paid prior to October 31, $150,000.
3.Michelle Clark, independent accountant who audits the company’s accounts and performs consulting services, $16,500; gross amounts paid prior to October 31, $42,500.
4. James Wu, treasurer, gross monthly salary of $6,000; gross earnings prior to October 31, $60,000.
5. Payment to Editorial Publishing Services for monthly services of Betty Jo Bradley, an editorial expert, $6,000; amount paid to Editorial Publishing Services prior to October 31, 2019, $34,000.
INSTRUCTIONS
Use an earnings ceiling of $122,700 for social security taxes and a tax rate of 6.2 percent and a tax rate of 1.45 percent on all earnings for Medicare taxes. Prepare a schedule showing the following information:
Each employee’s cumulative earnings prior to October 31.
Each employee’s gross earnings for October.
The amounts to be withheld for each payroll tax from each employee’s earnings; the employee’s income tax withholdings are Paul Parker, $5,600; Carolyn Wells, $4,200; James Wu, $1,320.
The net amount due each employee.
The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees.
Prepare the general journal entry to record the company’s payroll on October 31. Use journal page 22. Omit explanations.
Prepare the general journal entry to record payments to employees on October 31.
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The following gives the number of pints of type A blood used at Woodlawn Hospital in the past 6 weeks.
| WEEK OF | PINTS USED |
|---|---|
| August 31 | 360 |
| September 7 | 389 |
| September 14 | 410 |
| September 21 | 381 |
| September 28 | 368 |
| October 5 | 374 |
a. Forecast the demand for the week of October 12 using a 3-week moving average.
b. Use a 3-week weighted moving average, with weights of .1, .3, and .6 using .6 for the most recent week. * Then, forecast demand for the week of October 12.
c. Compute the forecast for the week of October 12 using exponential smoothing with a forecast for August 31 of 360 and a=.2
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